Samke Limited sells new equipment and repairs equipment for their regular customers. The following information was extracted from the accounting records for the financial year ended 30 June 2021
Samke Limited sells new equipment and repairs equipment for their regular customers. The following information was extracted from the accounting records for the financial year ended 30 June 2021
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Extracted from the Pre-Adjustment
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R |
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Fixed deposit |
160 000 nie in nie Asset |
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Inventory: Trade goods |
219 800 nie in nie Asset |
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Debtors control |
39 090 nie in nie Asset |
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Machinery |
224 000 |
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|
130 000 |
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Long term borrowing: Finhouse |
281 200 liability nie in nie |
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Sales |
1 680 000 |
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Debtors allowances/ |
17 000 |
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Cost of sales |
1 050 000 |
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Service fee income (in respect of repair services) |
297 140 |
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Rent income |
105 000 |
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Interest income |
11 200 |
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Salaries and wages |
294 640 |
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Audit fees |
30 000 |
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Directors fees |
230 000 |
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Consumable stores |
51 100 |
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Bank charges |
5 240 |
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Travel and entertainment - Directors |
15 910 |
- Adjustments and additional information:
The internal auditors have identified the following errors or omissions:
2.1 auditors are owed a further R28 000 in audit fees.
2.2 Bank charges of R310 reflected on the June 2021 bank statement have not yet been entered in the books.
2.3 The stock count on 30 June 2021 revealed the following on hand:
- Inventory: Trade goods; R202 000
- Consumable stores; R900
2.4 The tenant paid the July and August rent in June 2021. The rent was increased by R700 per month on 1 January 2021.
2.5 Provide for depreciation on machinery at 10% p.a. on the diminishing-balance method. Note that new machinery costing R30 000 was purchased on 31 December 2020, (this was recorded correctly).
2.6 Interest on the loan was capitalised. The loan statement from Finhouse on
30 June 2021 reflects the following:
The interest expense for the year has not yet been entered in the books.
2.7 A, S Moon, dated 28 June 2021 was not recorded in the books. The credit note was for price reduction on unsatisfactory repair of a piece of equipment, R540.
2.8 Assume a company tax rate of 30%.
Required:
Prepare a Statement of profit or loss and other comprehensive income for the year ended 30 June 2021 in compliance with International Financial Reporting Standards appropriate to Samke Ltd’s business activities. (20)
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Samke Limited |
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Statement of profit or loss and other comprehensive income for year ended 30 June 2021 |
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2021 |
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R |
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Revenue |
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Gross Sales |
297 140 |
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Sales |
1 680 000 |
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Rent Income (105 000 - 15 600) |
89 400 |
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Interest Income |
11 200 |
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Total Revenue |
2 077 740 |
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Cost of Goods Sold |
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Opening Inventory |
219 800 |
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Total Goods Available |
219 800 |
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Less Closing Inventory |
-202 000 |
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Total Cost of Goods Sold |
17 800 |
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Cross Profit ( 2 077 740 - 17 800 ) |
2 059 940 |
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Distribution, Administration and other Expenses |
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Salaries and Wages |
294 640 |
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Consumable Stores (51 100 - 900) |
50 200 |
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Audit Fees (30 000 + 28 000) |
58 000 |
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Travel and Entertainment - Directors |
15 910 |
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Depreciation add calculation |
7 900 |
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Directors’ fees |
230 000 |
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Debtors control |
39 090 |
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Debtors Allowances |
17 000 |
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Bank Charges (5240 + 310) |
5 550 |
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Long Term borrowing: Finhouse Interst Expenses |
52 160 |
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Cost of Sales |
1 050 000 |
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Other Expenses: Credit note: S Moon |
540 |
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Total Operation Expenses |
-1 820 990 |
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Operation Income before taxes (2 059 940 - 1 820 990) |
238 950 |
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Less Income Tax Expenses (238 950 x 30% = 71685) |
-71 685 |
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Profit/Total comprehensive income for the month (257 250 - 71 685) |
167 265 |
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Interest Expenses - calculate Interest Rate |
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Account Balance |
326 000 |
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Original Balance |
281 200 |
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Divide Account Balance with Original Balance time in years - 1 x 100 = % |
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326 000 / 281 200 x1-1= 0.16 x100 = 16% |
16% |
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Interest Expenses - calculate Interest Charge |
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Unpaid Balance |
326 000 |
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Interest Charge |
16% |
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Unpaid Balance x Interest Charge - 326 000 x 16% = 52 160 |
52160 |
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Machinery Depreciation |
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Machinery |
224 000 |
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New Machine |
-30 000 |
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|
194 000 |
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less Accumulate depreciation Machinery |
-130 000 |
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|
64 000 |
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Equipment at 10% |
10% |
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old Machine ( 64 000 x 10%) |
6400 |
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New Machine (30 000 x 10% *(6/12)) |
1500 |
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Old and New Machine ( 6400 + 1500) |
7900 |
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Audit Fees |
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Audit Fees |
30 000 |
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Further owed Audit fees |
28 000 |
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58 000 |
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Consumable |
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Consumable Stores |
51 100 |
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Consumables stores |
-900 |
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50 200 |
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Bank Charges |
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Bank Charges |
5 240 |
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Bank Charges |
310 |
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5 550 |
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Rent Income |
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6A + 8(A+700) = 105 000 |
105 000 |
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14A + 5 600 = 105 000 |
105 000 |
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14A = 99 400 (105 000 - 5 600) |
99 400 |
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A = 7 100 (99 400 / 14) |
7 100 |
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7100 + 700 = 7800 x 2 = 15 600 |
15 600 |
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105 000 - 15 600 = 89 400 |
89400 |
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